A flower shop makes a large sale for $1,000 on November 30.The customer is sent a statement on December 5 and a check is received on December 10.The flower shop follows GAAP and applies the revenue recognition principle.When is the $1,000 considered to be recognized?
A)December 5
B)December 10
C)November 30
D)December 1

Question

Quizplus · Accepted Answer

According to the revenue recognition principle under GAAP, revenue is recognized when it is earned and realizable, which in this case is when the sale is made on November 30.

A Flower Shop Makes a Large Sale for $1,000 on November